Hertz Global (NYSE:HTZ) Holdings’ order of 100,000 Teslas by the end of 2022 drove the value of the EV car giant higher to more than $US1 trillion. The move helped Wall St to finish its trading day in the green, with that momentum to spill over to the ASX today.
ASX futures were up 14 points or 0.2% to 7,438 near 7am AEDT, pointing to a solid start in morning trading.
Here’s what we saw:
- The Aussie dollar eased from highs near US75.05 cents to lows near US74.75 cents and was near US74.90 cents at the US close.
- Global oil prices rose by up to 0.5% on Monday, with traders worried about tight global supplies.
- The Brent crude price rose by US46 cents or 0.5% to US$85.99 a barrel.
- The US Nymex crude price was unchanged at US$83.76 a barrel.
- Base metal prices rose by between 0.2-3.2% on Monday with zinc up the least and nickel the most.
- Copper rose for the first time in three days, up by 2.2%. Investors are hedging against inflation and responding to low inventories.
- The gold futures price rose by US$11.80 or 0.7% to U$1,808.10 an ounce.
- Spot gold was trading near US$1,807 an ounce at the US close. Iron ore fell by US60 cents or 0.5% to US$119.75 a tonne
Australian market
The S&P/ASX 200 closed 0.3% higher at 7,441 on Monday with the tech and industrials the only sectors in the red.
On the oil and gas front, Ampol reported its adjusted measure of EBIT climbed 75% to $102 million in the September quarter.
“The recent announcements from the NSW and Victorian state governments to lift COVID restrictions linked to higher vaccination rates is encouraging,” Ampol chief executive Matt Halliday said.
“While we do expect volumes to begin to recover as consumer mobility increases, crude and refined product prices have continued to trend higher in recent weeks. This will benefit Lytton’s profitability but will temper retail margins in the short term. Additionally, the reopening of domestic and international borders will be positive for jet demand.”
LNG producer Oil Search hiked September quarter sales 12% to $US409 million ($546 million).
The PNG-based company said LNG prices increased 16% on the prior quarter.
Oil Search tightened its full-year production guidance to between 26 million barrels of oil equivalent and 28 million boe. Calendar 2021 investment expenditure guidance was lowered to between $US185 million and $US275 million, from $US250 million to $US350 million.
Over on the leisure front, Crown Resorts finally received some good news, with its Victorian operations expected to be allowed to keep control of its Melbourne casino.
Crown will have to meet tough new standards to keep operating.
The Royal Commission report will be released today by the State Government, including the government’s response to recommendations in the face of money laundering allegations.
The pain isn’t over for Crown executives. Newly minted CEO and former Lendlease boss Steve McCann, along with major shareholder James Packer and other Crown executives, must still front a separate Royal Commission in Western Australia.
Shares in Crown closed at $9.66, up 0.31%.
The big news yesterday was the agreement between the Liberal and National parties over net-zero emissions, which we will have more on in our midday report.
Australian indices
- ASX 200 was steady at 7,449.30.
- ASX24 futures was up 0.2% to 7,438.
- S&P/ASX Small Ordinaries rose 0.034% to 3,557.50.
- All Ordinaries rose 0.11% to 7,763.60.
US markets
All three benchmarks were higher on Wall St in overnight trading with the Nasdaq pacing the advance.
The Dow and S&P 500 both reset their closing record highs, while the Nasdaq was about 1% from a record.
“This year, broad market indices have benefited from robust earnings growth — the rising tide lifts all boats adage has been in full effect,” Principal Global Investors chief strategist Seema Shah told Bloomberg.
More earnings reports today could see US markets lift higher again. Leading the way on the quarterly front so far have been Well Fargo with an 80% lift in quarterly profit and a 76% increase for HSBC to US$5.4 billion.
HSBC announced a US$2 billion buy-back rather than declaring a dividend.
Shares In PayPal (NASDAQ:PYPL) rose 2.7% after ditching plans to buy Pinterest for as much as US$45 billion. Shares in Pinterest fell by 12.7%. Shares of Kimberley-Clark lost 2.2% after it cut its 2021 profit outlook due to higher input costs.
The big news came out of Tesla’s offices.
Tesla tops the trillion
Shares in Tesla are up 12.7% this morning, taking its market capitalisation to US$1.029 trillion. It is now, perhaps, the most valuable car company ever.
“The staggering rally came after Hertz placed an order for 100,000 Teslas, the largest ever order for a single buyer and a definitive move into electric vehicles by the company,” Joseph Palmer & Sons director Alex Moffatt said.
“It is also not bad for a company that went broke and only emerged from bankruptcy last June. A separate car industry report helpfully informed me that Tesla’s Model 3 has set a new record by becoming the first electric vehicle to top the monthly sales charts in Europe edging out old favourites like the Volkswagen Golf and Renault Clio.”
Tesla is on a roll.
Earnings last week proved its resilience in spite of a semiconductor shortage that has weighed down other automakers.
Morgan Stanley (NYSE:MS) analysts have now increased their target on Tesla to $1,200 from $894, pointing to the company’s “extraordinary” revenue in the last quarter despite supply chain problems.
Facebook’s revenues grow
It is in the wars over its ethics, but that hasn’t stopped Facebook from reporting revenue growth of 35% to $US29 billion.
This was lower than analyst expectations, but still a solid performance.
The slower growth is believed to be, in part, due to the privacy changes in Apple’s operating system, which now allows users to avoid being targeted by advertising via apps.
"We made good progress this quarter and our community continues to grow," Facebook founder and CEO Mark Zuckerberg said.
"I'm excited about our roadmap, especially around creators, commerce and helping to build the metaverse."
Facebook has flagged fourth-quarter total revenues to be between $US31.5 billion-$US34 billion.
This is again lower than expectations and "reflects the significant uncertainty we face in the fourth quarter in light of continued headwinds from Apple's iOS 14 changes, and macroeconomic and COVID-related factors", Facebook said.
US indices
- Dow Jones rose 0.2% 35,741.15.
- S&P 500 rose 0.5% to 4,566.48.
- Nasdaq rose 0.9% to 15,226.71.
European markets
European markets were higher on Monday.
The focus is on higher inflation rates and rising bond yields.
Mining rose 1.8%, energy rose 1% and banks rose 0.8%.
However, telecom fell by 0.9%, industrials fell by 0.7% and utilities fell by 0.6%.
Around 18% of STOXX 600 companies have issued profits and 63% have beaten analyst estimates compared with 52% in a typical quarter.
In London trade shares in Rio Tinto rose by 2.0% and BHP rose by 2.8%.
European indices
- STOXX 600 rose 0.070% to 472.21.
- German Dax rose 0.4% to 15,599.23.
- UK FTSE rose 0.3% to 7,222.82.